Emergence of an H2 plant with German participation planned in the Southeast Asian country.
Munich-based August Global Investment wants to invest around $500 million to construct a green hydrogen production plant in Indonesia, writes the news portal CNBC Indonesia. The project is expected to involve three Indonesian state-owned companies, with which a memorandum of understanding has been signed, in addition to August Global Investment, which invests in energy projects, among others.
The production capacity of the plant, planned for Aceh province on the northwestern tip of Sumatra island, is expected to be 35,000 tons per year. Reuters reports that August Global Investment CEO Fadi Krikor expects construction to start in 2024 and production to begin in 2026. On the Indonesian side, the project involves state-owned fertilizer companies PT Pupuk Indonesia and Pt Pupuk Iskandar Muda. The power supply for producing carbon-neutral H2 comes from renewable energy sources via the state-owned utility PT Perusahaan Listrik Negara.
According to the Secretary General of the Indonesian Ministry of Energy and Mineral Resources, Dadan Kusdiana, hydrogen is primarily used in his country to produce fertilizers, CNBC Indonesia added. He said he hopes the cooperation with the German investment company will accelerate the country’s energy transition. Indonesia’s government has recently pursued a hydrogen strategy and wants to produce it to achieve the island nation’s goals of a climate-friendly transport sector from 2031 and a lower-pollution transport sector from 2041.
However, it is questionable how much hydrogen produced in Indonesia will remain in its own country. This is because the CEO of August Global Investment also expressed interest in exporting the raw material “to Germany, Japan, and other Southeast Asian countries,” Reuters adds.